Global surveys indicate uphill battle for Laos

At least three global surveys disclosed their findings recently, with all three indicating that Laos is going backwards in term of in global development rankings

The global corruption perceptions index (CPI) released by Transparency International last Wednesday ranked Laos 135th out of 180 countries and territories. The implication is that the higher the number in the ranking, the higher the level of corruption perception.

Scoring just 29 points, Laos’ ranking dropped 12 places from last year, according to the 2017 index which ranks countries based on perceived levels of public sector corruption.

This ranking places Laos second from bottom among the 10 Asean member states. In simple words, eight other Asean members have performed better than Laos whose ranking exceeds only Cambodia’s.

The deterioration of Laos’ ranking has seen Myanmar overtake Laos, with Singapore ranked as the best performer in Asia and Asean.

Corruption in Laos has caused huge losses of state assets in recent years.

A report released in December last year by the State Inspection Authority suggested that Laos had lost more than 480 billion kip through corruption over the past five years, which directly affected national development and poverty reduction efforts.

The report also claimed that disciplinary action had taken place to suppress corruption. Over the past five years, more than 100 people, of whom 86 were government officials, have been apprehended as a result of their alleged involvement in fraudulent activities and embezzlement. But this has not improved Laos’ ranking.

Road quality survey

The World Economic Forum recently disclosed the findings of its opinion survey, suggesting that Laos is among eight countries in Asia that have the worst road quality.

The survey stated that road infrastructure is the marker of a country’s development and is significant both for the safety and satisfaction of citizens.

The seven other countries are Bhutan, Vietnam, Cambodia, the Philippines, Mongolia, Bangladesh and Nepal. Laos was behind Bhutan and Vietnam but ahead of the remaining five.

It will come as no surprise that Laos – one of the world’s least developed countries and bound by financial constraints – features in the group judged to have the worst-quality roads.

However, Laos could do more to improve its roads if the budget allocated for that purpose was fully used for that purpose.

Reports indicate that a number of road construction projects did not go through a bidding process, which led to unreasonably high costs and impeded road development efforts.

A senior inspector from the State Inspection Authority, who wished to remain anonymous, told Vientiane Times that financial fraud mainly occurred in development projects, particularly those that went ahead without evaluation or bidding processes.

Ease-of-doing-business (EDB) survey

Earlier this year, the World Bank published its EDB survey, which ranked Laos 141st out of 190 economies worldwide.

Laos’ ranking in this survey dropped two places compared to 2017 when the country was ranked 139th.

Against this backdrop, the government has announced an ambitious goal to jump from a ranking of three digits to a two-digit ranking (meaning 99 or higher) by 2020.

This means Laos needs to increase its ranking by at least 42 places to 99 in a period of just two years and 10 months.

Without a doubt, this ambitious announcement was widely welcomed by the general public and the business community in particular.

Unfortunately, similarly ambitious targets have not been set with regard to the first two surveys – corruption and road quality. There has been no indication of the extent to which Laos is aiming to improve in these fields, and no specific targets have been set.

Laos’ deterioration in these areas of the global development agenda is disappointing in light of the development roadmap and implementation measures announced by the country’s current leadership, which assumed a five-year tenure in April 2016.

If these measures are fully or largely realised, it is likely that Laos’ rankings will be more impressive.

Rising up the rankings is of vital importance

With Laos making a greater effort in recent years, this should lead to improvements in internal situations with respect to several development agendas. But we need to keep in mind that many other countries are making similar efforts to fulfil their development agendas. This means that if Laos develops at a slower pace, the country will be unable to rise in the rankings.

Therefore, the government needs to double or even triple its efforts to advance the country ahead of others in order to make Laos more attractive to potential foreign investors.

Rising up the global rankings is of vital importance because countries across the world use the findings of these surveys as reliable indicators when assessing their progress. Businesses in particular take these indicators into account when deciding where to invest.

Some people justify the situation by saying that the development roadmap which the government, led by Prime Minister Thongloun Sisoulith, announced almost two years ago, has not yet fully born fruit and needs more time to achieve results.

There are two years and 10 months until the end of 2020. If by then Laos still cannot achieve a two-digit ranking in the ease-of-doing-business survey and cannot graduate from least developed country status as announced, it is no longer justifiable to claim that we need more time.